Two university professors have been caught up in an alleged insider trading conspiracy, including respected lecturer and retired St. John’s University professor, Dr. John F. Marshall. He is accused of giving Pace University Professor Alan L. Tucker insider information, resulting in Tucker making a cool $1.4 million on the tips in 2007. Dr. Marshall’s brother-in-law, Mark R. Larson is also accused of buying shares of I.S.E. stock based on the tips.

A towering figure around Wall Street, Marshall is the author of such popular books as “Financial Engineering: A Complete Guide to Financial Innovation.” He is now accused of using his position on the board of an electronic exchange for stock options to pass along tips to Tucker.

After he retired in 2000 from St. John’s, Marshall helped form the International Securities Exchange, the electronic options exchange — eventually joining it board and serving as chairman of its finance and audit committee. Wen a German exchange named Eurex indicated that it wanted to buy the exchange, Marshall reported tipped Tucker and Larson, who bought options to buy or shares of ISE stock.

When the offer came through, the stock soared and they made a killing.

This is the problem with being a law professor. The best tips that my colleagues share is a forthcoming textbook and a rumor of an indictment.

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